| Fri 31 Oct 2008, 8:00 | | CCI - CIC Holdings - Group Interim Results For The Six Months Ended |
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CCI
CCI
CCI - CIC Holdings - Group Interim Results For The Six Months Ended
31 August 2008
CIC Holdings Limited
(Incorporated in the Republic of Namibia)
(Registration number 95/502)
(Registered as an external company in the Republic of South Africa)
(Registration number 1996/002672/10)
Share code: CCI & ISIN: NA0009174278
("CIC" or "the Group")
GROUP INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2008
KEY INFORMATION
- Revenue increased by 24% to N$ 1,0 billion;
- Attributable earnings increased by 104,5% to N$ 19,4 million;
- Headline earnings per share increased by 60,4% to 8,5 cents per share.
COMMENTARY
The majority of the Group`s income streams for the period emanated from
countries outside South Africa. Top line sales growth has been good, with a
combination of volume and inflation growth for the period. All businesses in the
various countries experienced good sales growth.
The pressures of rising costs have been linked to inflation in most cost areas.
The area of distribution, which is affected by increased fuel prices added
disproportionately to the total cost increases of the Group, whilst customer
service expectations needed to be met.
All categories of products, including fast moving consumer goods, tobacco
products and alcoholic beverages that make up the core agency business,
performed well.
The staffing solutions business performed to expectation despite losing a major
blue collar staffing contract at the end of last year. All other divisions
performed above expectation.
RESULTS
Total revenue for the period was N$1 029,5 million (2007 N$829,8 million).
Profit from operation increased by 53,2% to N$30,7 million with a margin
improvement of 23,1% to 2,9%. This was mainly due to a better portfolio
category mix.
Attributable profit to the Group`s shareholders increased from N$9,5 million to
N$19,4 million, up 104,5%. This was as a result of good performances across the
board from existing business as well as new business acquisitions in South
Africa, together with the increased shareholding in Ocean Traders International.
Headline earnings per share attributable to shareholders increased from 4,7
cents to 7,7 cents on a fully diluted basis, up 63,8% over the previous period.
The Group successfully listed on the AltX on 30 November 2007. The listing
increased the total number of shares in issue from 202 188 081 to 252 188 081
through the private placement of 50 million share at R1 per share.
The Balance Sheet reflects the increased working capital requirements due to
price increases this year that resulted in higher inventory, debtors and
creditors values. This, together with strategic stock purchasing, resulted in
higher working capital levels at the end of August 2008.
Higher working capital levels, the acquisitions in associate companies and the
increased shareholding acquired in subsidiary companies resulted in cash and
cash equivalents decreasing from N$60,3 million to N$35,9 million at the end
of August 2008.
Net asset value per share increased from 71,4 cents to 79,6 cents per share.
REGIONAL REVIEW
SOUTH AFRICA
The staffing solutions business` strategic move into the hospitality market, and
the acquisition of the Foundation Group, operating in this market segment, added
significant critical mass to the business. The technical staff market has also
seen growth and is adding valuable new accounts to its customer list. Labour
Supply Chain ("LSC") ventured into Botswana over a year ago and is experiencing
success with a number of new accounts contributing successfully to
profitability. LSC has underlying cost structure issues and needs to gain new
blue collar accounts going forward. Its hospitality division has significant new
business in the pipeline for 2009.
The investment in Vital Merchandising Services has contributed positively to the
period`s results. This was followed by the purchase of a shareholding in the
Focus Retail Services business in the Western Cape. A further investment was
made in the Natal Sales and Merchandising business in KwaZulu-Natal.
The three businesses fulfil the strategic imperative of entering the sales and
merchandising market representing blue chip manufacturers, servicing the
wholesale and retail customer base within South Africa.
SWAZILAND / MOZAMBIQUE
Ocean Traders International has delivered satisfactory results for the year to
date. The alcoholic beverage portfolio continued to deliver strong top line
growth. The fast moving consumer goods basket increased with the take on of new
principals, adding to critical mass and aligning the business to grow its
footprint through infrastructure, stockholding, improved service levels and
distribution to customers.
NAMIBIA / BOTSWANA
The businesses have performed to expectation for the period. Margins continue to
come under pressure as rising costs, particularly in distribution, highlight the
cost of service to the customers in large geographic territories.
All categories however are showing real volume growth. Price increases continue
to be the order of the day, and there has been a significant upside in
profitability as the businesses capitalize on buying in stock against rising
prices. Cost focus remains a key issue, as these businesses have particularly
low margins versus the rest of the Group.
Private and public sector investments in infrastructure projects within both
countries have stimulated growth, which is likely to continue for the
foreseeable future.
PROSPECTS
The escalation of global market volatility is of great concern. Food prices and
ingredients within the fast moving consumer goods portfolio are likely to
increase in 2009 in soft currency terms, as the weaker Rand affects raw material
input costs. Whilst it is felt that the portfolio within CIC should deliver good
top line sales to Christmas, excessive price increases and negative consumer
sentiment may well dampen product purchases after the festive period.
Consumers however tend to migrate to quality brands in difficult trading
conditions where the risk of quality downside is offset by tried and tested
brand equity. This should assist in protecting financial performance going
forward.
There are also positive infrastructure and industry investment strategies within
Mozambique, Botswana and Namibia that will cushion the downturn of sales growth
within our Principal portfolio. The investments in the sales and merchandising
businesses will grow profits as clearly defined strategies are executed.
In addition the Board of Directors continue to apply their minds to review
investment into new businesses within sub-equatorial Africa, to further protect
profit streams for the future.
For and on behalf of the board
T P Rogers F W Britz
Chief Executive Officer Chief Financial Officer
30 October 2008
ABRIDGED GROUP INCOME STATEMENT
6 months 6 months 8 months
ended ended ended
31/08/2008 31/08/2007 29/02/2008 Change
N$`000 N$`000 N$`000 %
UNAUDITED UNAUDITED AUDITED
Revenue 1,029,555 829,802 1,248,739 24.1
Profit from operations 30,762 20,085 33,552 53.2
Depreciation 3,606 3,249 4,135 11.0
Net finance income/
(expense) (833) (201) (1,167) 314.4
Share of profit of
equity accounted investees 3,559 633 4,574 462.2
Profit before tax 29,882 17,268 32,824 73.0
Tax 8,984 5,648 9,352 59.1
Profit for the period 20,898 11,620 23,472 79.8
Attributable to:
Equity holders of the
company 19,397 9,486 20,418 104.5
Minority interest 1,501 2,134 3,054 (29.7)
20,898 11,620 23,472 79.8
Reconciliation of
headline earnings:
Profit for the period 20,898 11,620 23,472
Non - trading items
- capital profit (130) - (129)
- capital loss - - 1,500
Plus : tax on the above
items 32 - 43
Headline earnings 20,800 11,620 24,886 79.0
Headline earnings
attributable to:
Equity holders of the
company 19,297 9,486 21,119 103.4
Minority interest 1,503 2,134 3,767 (29.6)
20,800 11,620 24,886 79.0
Earnings per ordinary
share (cents):
Weighted average 8.5 5.3 10.4 60.4
Diluted 8.2 5.3 9.7 54.7
Fully diluted 7.7 4.7 8.1 63.8
Headline earnings
per ordinary share (cents):
Weighted average 8.5 5.3 10.8 60.4
Diluted 8.1 5.3 10.0 52.8
Fully diluted 7.7 4.7 8.4 63.8
Number of ordinary
shares in issue (`000)
Weighted average 226,900 180,133 195,550
Diluted 237,015 180,133 210,790
Fully diluted 252,188 202,188 252,188
ABRIDGED GROUP BALANCE SHEET
6 months 6 months 8 months
ended ended ended
31/08/2008 31/08/2007 29/02/2008
N$`000 N$`000 N$`000
UNAUDITED UNAUDITED AUDITED
ASSETS
Non-current assets 116,467 63,491 95,281
Property, plant and equipment 24,731 18,988 24,766
Intangible assets 33,612 29,735 33,658
Deferred tax 9,558 9,048 8,285
Investments in equity
accounted investees 44,018 5,720 28,572
Other receivables 4,548 - -
Current assets 432,916 333,955 392,733
Inventories 119,411 86,491 105,591
Trade and other receivables 272,230 183,985 196,918
Loans to equity
accounted investees 4,268 2,000 3,105
Taxation 1,137 858 1,657
Cash and cash equivalents 35,570 60,621 85,462
Total assets 549,383 397,446 488,014
EQUITY AND LIABILITIES
Capital and reserves attributable
to equity holders 200,618 144,266 187,471
Issued capital 129,606 83,542 129,561
Reserves 71,012 60,724 57,910
Minority interest 4,019 7,407 3,203
Total equity 204,637 151,673 190,674
Non-current liabilities 30,862 27,196 30,919
Interest-bearing borrowings 16,522 14,488 17,324
Deferred tax 810 348 594
Deferred operating lease liabilities 13,530 12,360 13,001
Current liabilities 313,884 218,577 266,421
Current portion of
interest-bearing borrowings 1,353 4,284 7,117
Current portion of deferred
operating lease liabilities 787 633 849
Accounts payable and accrued
liabilities 297,083 195,163 226,963
Subsidiary purchase consideration
payable 9,511 - 22,605
Taxation 5,150 4,299 4,246
Bank overdraft - 14,198 4,641
Total equity and liabilities 549,383 397,446 488,014
Net asset value per share (cents) 79.6 71.4 74.3
ABRIDGED GROUP CASH FLOW STATEMENT
6 months 6 months 8 months
ended ended ended
31/08/2008 31/08/2007 29/02/2008
N$`000 N$`000 N$`000
UNAUDITED UNAUDITED AUDITED
Cash generated by operations 31,096 18,700 37,596
Change in working capital (19,023) 15,178 (22,260)
Net finance and investment
income/(expense) 249 (201) 160
Dividends received 2,736 - -
Taxation paid (8,617) (3,632) (8,504)
Dividends paid (8,211) - (8,302)
Cash flow from operating activities (1,770) 30,045 (1,310)
Investment to maintain operations: (2,663) (1,685) (8,706)
- Additions to intangible asset - - (251)
- Additions to property, plant and
equipment (3,237) (1,685) (8,712)
- Proceeds on disposal of
property, plant and equipment 574 - 257
Investments in equity accounted
investees (28,072) (7,720) (3,605)
Investment in subsidiary (6,369) - (25,195)
Proceeds on disposal of portion
in subsidiary 444 - -
Cash flow from investing activities (36,660) (9,405) (37,506)
Proceeds on shares issued 45 - 47,263
Net movement in borrowings (6,566) (291) 5,154
Cash flow from financing activities (6 521) (291) 52,417
Net movement in cash and cash
equivalents (44,951) 20,349 13,601
Cash and cash equivalents at
beginning of the period 80,821 26,074 67,220
Cash and cash equivalents at
end of period 35,870 46,423 80,821
STATEMENTS OF CHANGES IN SHAREHOLDERS` EQUITY
6 months 6 months 8 months
ended ended ended
31/08/2008 31/08/2007 29/02/2008
N$`000 N$`000 N$`000
UNAUDITED UNAUDITED AUDITED
Balance at beginning of period
As previously reported 190,674 139,573 146,276
Share option reserve - - 1,415
Shares issued - - 47,360
Shareholding increased in
subsidiary (3,500) - (20,574)
Shareholding decreased in
subsidiary 4,356 - -
Translation of foreign entities 190 480 2,407
Share options exercised 45 - -
Net profit for the period 20,898 11,620 23,472
Ordinary dividends (8,026) - (8,341)
Balance at end of the period 204,637 151,673 190,674
Comprising:
Share capital 227 180 227
Share premium 129,379 83,362 129,334
Share option reserve 3,505 2,104 3,586
Accumulated profit 70,097 63,778 57,075
Translation of foreign entities (2,590) (5,158) (2,751)
Minority interest 4,019 7,407 3,203
204,637 151,673 190,674
GROUP SEGMENT REPORT
For the six months ended 31 August 2008
GEOGRAPHIC SEGMENTATION
Namibia and Botswana
2008 2007
N$`000 N$`000
Revenue 839,670 649,955
Attributable earnings 14,762 6,351
Capital expenditure 1,707 1,171
Segment assets and
liabilities
- Assets 361,502 299,960
- Liabilities (267,354) (195,078)
- Inter-group balances (36,937) (64,733)
South Africa Swaziland and Mozambique
2008 2007 2008 2007
N$`000 N$`000 N$`000 N$`000
Revenue 134,389 127,045 55,496 52,802
Attributable earnings 4,781 3,813 3,590 2,153
Capital expenditure 1,121 514 265 -
Segment assets and
liabilities
- Assets 134,096 55,892 15,895 11,589
- Liabilities (68,570) (40,496) (3,738) (4,921)
- Inter-group balances (33,574) (552) (418) (242)
Group services Total
2008 2007 2008 2007
N$`000 N$`000 N$`000 N$`000
Revenue - - 1,029,555 829,802
Attributable earnings (3,736) (2,831) 19,397 9,486
Capital expenditure 144 - 3,237 1,685
Segment assets and
liabilities
- Assets 37,890 30,005 549,383 397,446
- Liabilities (5,084) (5,278) (344,746) (245,773)
- Inter-group balances 70,929 65,527 - -
OPERATIONAL SEGMENTATION
Agency divisions Staffing solutions
2008 2007 2008 2007
N$`000 N$`000 N$`000 N$`000
Revenue 958,476 750,568 71,079 79,234
Attributable earnings 21,478 10,638 1,655 1,679
Capital expenditure 2,173 1,245 920 440
Segment assets and
liabilities
- Assets 485,348 345,718 32,838 21,723
- Liabilities (392,210) (290,032) (25,075) (15,990)
Group services Total
2008 2007 2008 2007
N$`000 N$`000 N$`000 N$`000
Revenue - - 1,029,555 829,802
Attributable earnings (3,736) (2,831) 19,397 9,486
Capital expenditure 144 - 3,237 1,685
Segment assets and
liabilities
- Assets 31,197 30,005 549,383 397,446
- Liabilities 72,539 60,249 (344,746) (245,773)
Basis of preparation and accounting policies
The condensed consolidated interim financial statements for the six months ended
31 August 2008 have been prepared in accordance with, and containing the
information required by International Accounting Standard 34: Interim Financial
Reporting and with International Financial Reporting Standards (IFRS). The
accounting policies applied are consistent, in all material respects, with those
used in the Annual Financial Statements for the eight months ended 29 February
2008.
These interim financial statements have not been audited or reviewed.
Post-balance sheet events
There have been no significant events subsequent to 31 August 2008 and up to the
date of this report that would require adjustment.
Earnings per share
The difference between the total number of shares in issue (fully diluted) and
the weighted average number of shares in issue and the diluted number of shares
in issue relates to treasury shares, which are held by the share trusts for
share options granted to employees that are exercisable in the future.
Dividend
No dividend has been declared as the Group only declares a final dividend after
its financial year end.
Change in financial year end
The Group has changed its financial year end from 30 June to the last day of
February. The comparative numbers in this results announcement have therefore
not been previously published.
Registered office
Corner of Iscor and Solingen Streets
Northern Industrial Area, Windhoek
(PO Box 98, Windhoek, Namibia)
Registered as an external company in the Republic of South Africa
Tuscany Office Park, Block 5
Coombe Place
Rivonia
(PO Box 3581, Rivonia, 2128)
Tel: 011 8070109
Fax: 011 8071316
Transfer Secretaries
Computershare Investor Services (Pty) Limited
70 Marshall Street, Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)
Designated advisor
Questco Sponsors (Pty) Limited
Corporate advisor
PSG Capital (Pty) Limited
Directorate
BH Kent (Chairman)*, TP Rogers (Chief Executive Officer), EHT Angula*#,
FW Britz, H-B Gerdes *#, JA Holtzhausen*, P Malan*
* - Non-executive, # - Namibian Citizen
Company Secretary
JFB Smit
Business address
Tuscany Office Park, Block 5
Coombe Place, Rivonia
Date: 31/10/2008 08:00:01 Produced by the JSE SENS Department.
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